Morgan Stanley plans callable contingent income step-up notes tied to Russell 2000, Euro Stoxx 50

By Toni Weeks

San Luis Obispo, Calif., May 1 – Morgan Stanley plans to price callable contingent income step-up securities due May 29, 2025 linked to the worst performing of the Russell 2000 index and the Euro Stoxx 50 index, according to a 424B2 filing with the Securities and Exchange Commission.

The notes will pay a fixed monthly coupon at the applicable rate if each index closes at or above its coupon barrier level, 70% of the initial level, on the determination date for that month. The applicable rate is 7% for the first four years, stepping up to 10% on May 29, 2019 and to 12% on May 29, 2023.

The payout at maturity will be par plus the final contingent coupon if each index finishes at or above the 70% coupon barrier level. If either index falls below the 70% barrier level but each index finishes at or above its downside threshold level, 50% of the initial level, the payout will be par. Otherwise, investors will be fully exposed to the decline of the worst-performing index.

The notes are callable at par on any quarterly redemption date after one year.

Morgan Stanley & Co. LLC is the agent.

The notes will price May 26 and settle May 29.

The Cusip number is 61761JYV5.

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